Desktop is growing on the back of AIO, NUC and more: Intel

Nermin Bajric |
May 2, 2014

Contrary to the doom and gloom predictions surrounding the desktop space over the past 24 months, Intel claims renewed optimism about the direction of the market segment, having experienced seven per cent year-on-year (YoY) volume growth in its fourth quarter earnings for 2013.

Contrary to the doom and gloom predictions surrounding the desktop space over the past 24 months, Intel claims renewed optimism about the direction of the market segment, having experienced seven per cent year-on-year (YoY) volume growth in its fourth quarter earnings for 2013.

The company's Asia-Pacific and Japan (APJ; excluding China) regional sales organisation director, Philip Cronin, said all market indicators suggest that the formerly declining category is gaining traction as a result of the convergence of several factors.

"There has always been a large install base [of desktops]," Cronin told ARN. "They run on three, four, or five-year refresh cycles depending on the company. But there was a period of time of limited innovation."

"What we are seeing now is the combination of a few things: the transition of newer style of product coming through, such as the all-in-one (AIO) PC; the slimmer form factors of notebooks; changes in software and end of Windows XP support, and a little bit of smaller Next Unit Computing (NUC) opportunities which change the dynamic of deployments."

According to Intel, desktops represent 43 per cent of all PC unit shipments based on IDC's tracker data on February 2014.

Thirty-five (35) per cent of Intel-based desktops are sold through channel globally. The number is higher in APJ.

The company claims AIO is receiving particular market interest, and is growing faster than the wider desktop space despite currently representing only 10 per cent of the segment.

IDC reported in March that slightly more than five million units were shipped in 2009, a figure that stood at about 15 million in 2013. The research firm forecasts that the category will grow at a compound annual growth rate (CAGR) of nine per cent between 2014 and 2017, reaching about 23 million units shipped.

"AIO will cease being a niche aspiration and start to come into the mainstream," Cronin said. "We expect a spike in AIO over the next couple of years."

Cronin added that generating demand for AIO is making it a "pervasive product."

Part of this has been the prompt for the creation of AIOs at lower price points; the latest wave of devices has brought the base price of stationery, non-touch AIOs to about $US399, while mobile, touch-compatible devices start at $US499.

This allows resellers to present customers a broader set of options. Cronin said Australian and New Zealand (A/NZ) customers demand choice, and jump on board when it is given to them.

To achieve margins, resellers must be aligned on two fronts.

"Resellers need to understand what is available in the market, and understand what a customer's business model is in order to match the technology to business needs," Cronin said. "It's simple stuff.

Similarly, it will be about following vendors, which will be under pressure to differentiate themselves by either establishing a niche or making a bolder play across all price points.